Clothing Retailing in Australia Industry Market Research Report Now Updated by IBISWorld

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Widespread economic uncertainty over the past five years prompted consumers to become more cautious with their spending, hurting industry revenue. For these reasons, industry research firm IBISWorld has updated its report on the Clothing Retailing industry in Australia.

IBISWorld Market Research

IBISWorld Market Research

Growth in industry revenue has been undermined by declines in prices.

The Clothing Retailing industry has faced several tough years, with cautious consumer spending, intense competition, higher rent costs and the aftermath of the global financial crisis driving down revenue and profit margins. Over the five years through 2014-15, industry revenue is expected to contract by a compound annual 0.6%. Widespread economic uncertainty over the past five years prompted consumers to become more cautious with their spending. As a result, the private savings rate reached record highs. However, improved economic conditions have led to revenue growth over the past two years. As consumer sentiment and disposable incomes increase, industry revenue is expected to grow by 1.8% in 2014-15 to reach $13.1 billion. Growth in industry revenue has been undermined by a decline in prices. According to IBISWorld industry analyst Lauren Magner, “prices have been driven lower by fierce competition and the high Australian dollar that prevailed over much of the past five years.” The high value of the Australian dollar has meant that many retailers, especially larger operators, have been able to purchase stock at significant discounts. However, consumers have scaled back spending at bricks-and-mortar stores, inciting price reductions that effectively nullify any cost savings for operators.

Some merger and acquisition activity has taken place in the industry over the past five years, as major players have sought to capture a greater share of the market and improve economies of scale. “Several players have also attempted to reinforce their market positions by acquiring smaller companies that target similar markets,” says Magner. Competition is expected to heighten over the next five years, as industry participants fight for the consumer dollar. The entrance of a number of international players and the increased acceptance of online shopping will alter the industry's landscape. Industry participants will need to develop strong multichannel retailing strategies and position themselves in niche markets in order to flourish in this increasingly competitive environment.

The Clothing Retailing industry is characterised by a low level of market share concentration. The industry is highly fragmented and diverse with a large number of small, independent operators. Approximately 44.4% of retailers generate revenue between $200,000 and $2.0 million per annum, while only 5.9% earn $2.0 million or more. The majority of industry players employ between one and 19 people, with only 0.5% of enterprises hiring more than 200 people. A large proportion of businesses are owner-operated, accounting for an estimated 43.3% of the industry. Industry concentration is expected to remain low, due to the varied clothing retail segments that compete on price, style, quality, location and demographic. These multi-layered segments give consumers an abundance of choice and make it difficult for major players to cover a significant share of the market without incurring substantial costs.

For more information, visit IBISWorld’s Clothing Retailing industry in Australia report page.

Clothing retailers purchase a variety of apparel products and accessories from wholesalers and manufacturers and sell these products directly to consumers, generally without developing or changing them. Most retailers in the industry sell goods in one or more shops and may operate an online store. The industry excludes operators of department stores and online-only retailers.

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IBISWorld industry Report Key Topics

Industry Performance
Executive Summary
Key External Drivers
Current Performance
Industry Outlook
Industry Life Cycle
Products & Markets
Supply Chain
Products & Services
Major Markets
International Trade
Business Locations
Competitive Landscape
Market Share Concentration
Key Success Factors
Cost Structure Benchmarks
Basis of Competition
Barriers to Entry
Industry Globalisation
Major Companies
Operating Conditions
Capital Intensity
Technology & Systems
Revenue Volatility
Regulation & Policy
Industry Assistance
Key Statistics
Industry Data
Annual Change
Key Ratios

About IBISWorld Inc.
Recognised as the nation’s most trusted independent source of industry and market research, IBISWorld offers a comprehensive database of unique information and analysis on every Australian industry. With an extensive online portfolio, valued for its depth and scope, the company equips clients with the insight necessary to make better business decisions. Headquartered in Melbourne, IBISWorld serves a range of business, professional service and government organisations through more than 10 locations worldwide. For more information, visit http://www.ibisworld.com.au or call (03) 9655 3886.

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Gavin Smith
IBISWorld
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